Pricing Frequency Restrictions Curb the Initiation of Collusion with Ralph-C Bayer (submitted)
We experimentally test the impact of pricing-frequency restrictions on the price level in a 60 minute, real-time duopoly market. Our unregulated market allows for price changes at any time. We compare this to a real-time market where currently chosen prices are implemented at fixed intervals. Average price levels are significantly lower with price-frequency restrictions. With the help of two additional treatments, we rule out the size of strategic risk, and the decreased possibility of communicating through prices, as drivers of lower price levels in the restricted markets. Instead, discrete pricing periods reduce the ability to successfully initiate collusion by making it harder to establish common knowledge of the mutual willingness to collude.
Interaction Frequency and Cooperation in Infinitely Repeated Games, with Ralph-C Bayer (submitted)
Increasing the frequency at which firms interact in an oligopolistic market strengthens collusion incentives. When other firms can react more quickly, the incentive to undercut competitors' collusive prices is reduced. We experimentally test whether increased interaction frequency results in higher average profits, in line with the corresponding impact on collusion incentives. Surprisingly, we find that higher interaction frequency decreases collusion levels. We show that this effect is solely driven by the emergence of Edgeworth cycles when the pricing frequency is increased. Collusion incentives alone do not significantly impact profit levels.
Comparative learnings, with Simon Loertscher
Saving the platypus: automation and public goods provision, with David P. Byrne and Nisvan Erkal
Strategic uncertainty and cooperation in real-time markets, with Ralph-C Bayer and Steffen Huck
Designing a Smart Water Network: Real-Time Controlled Storages Network for Multi-Objective Stormwater Management, with Wei D. Xu, Darren Bos, Stephanie Lavau, Matthew J Burns, Kathryn L Russell, Mia K Tam, Rose Macaulay, Rhys Coleman, Tim D Fletcher
Creating a market for rainwater: a grid of household rainwater tanks